Lew Urges China to Stop Cyber-Theft to Ensure Global Influence

U.S. Treasury Secretary Jacob J. Lew said China needs to move faster to revamp its economy and stop stealing intellectual property if it wants more influence in global decision making.

“Policies where there’s a theft of intellectual property are just unacceptable for a country that wants to sit at the table and make the rules for the world,” Lew said in an interview with Charlie Rose airing on PBS tonight. “China sees itself as a country, appropriately, that should have a voice in making the rules for the next generation. They can’t have it both ways.”

Lew and other Obama administration officials have complained to China about cybercrime. The White House released a plan today for actions power plants, financial networks and other critical services can take to protect their computer networks from hacker attacks.

In November, a congressional commission found that the Chinese government wages “a large-scale cyber-espionage campaign” and “has successfully targeted the networks of U.S. government and private organizations.”

Lew said China was making changes to its economy, though not quickly enough.

“Not to be overly optimistic, I think we’re pushing on an open door in terms of the direction that we’re encouraging them to go,” Lew said. “They have a different view of time than we do and we’re going to find frustrating how slow the progress is.”

‘Faster’ Progress

“They need to understand that in order for this relationship to stay strong in the context of both the U.S. economy and public opinion, they’re going to need to show the progress in terms that are a little bit faster,” he said.

Lew said China would like the yuan to become a world currency.

“It kind of goes with wanting a seat at the table,” he said. “You can’t become a true world currency if you don’t have a market-determined exchange rate, and I think they know that.”

He said he has “seen progress” on the yuan, which the U.S. insists is undervalued. “We press and press and press that they need to make more progress,” Lew said.

Yuan forwards climbed to the strongest level in almost three weeks today after Chinese exports beat estimates and imports accelerated. Twelve-month non-deliverable yuan forwards touched 6.1100 during the day, the strongest level since Jan. 24.

U.S. Economy

The Treasury chief expressed optimism about the U.S. economy, which he said should be boosted by Congress approving a suspension of the debt limit, and appropriations and farm bills.

Commerce Department figures last month showed the U.S. economy expanded at a 3.2 percent annual pace in the fourth quarter as Americans’ spending climbed the most in three years, laying the ground for further improvement in 2014.

“We’ve seen values come back in a lot of housing markets, we’ve seen construction growing,” Lew said. “The trajectory over the last six months has undeniably been in a positive direction.”

Unemployment in January fell to 6.6 percent, the lowest level since October 2008, from 6.7 percent, a Labor Department report showed last week. Job growth in December and January was the weakest of any two-month period in the past three years.

“We still have a lot more to do,” Lew said. “Until we have an economy where everyone who wants to work can get a job, that everyone who wants to work full time can get a full-time job, we’re going to keep at it.”

On volatility in emerging economies, Lew said each market should be viewed individually.

“What we’ve seen in these last months is real differentiation between countries that have taken tough policy decisions” and those that haven’t, he said.